BSCM Formulas

BASICS OF SUPPLY CHAIN
FORMULAS-
Seasonal
Index
Period average demand

Average demand for all periods
seasonal demand (seasonal index) x (De-seasonalized demand)

(De-seasonalized demand : Average demand per period)
De-seasonalized
demand
Actual seasonal
Seasonal
Mean absolute deviation
Moving
average
(MAD) :
demand :
index
Annual demand forecast

Number of periods
Sum of absolute deviations :

Number of observations
Sum of period sales
Number of periods
Newforecast
(a) (latestdemand)
(Exponential Smoothing)
+ (l-a) (previousforecast)
Sum of absolute errors
Number of periods
,SE^S,SION
3: MASTER PLANNING
Level Production Plan
Total production needed
Total forecast demand
Production required each period
Ending inventory for period
1:
Ending inventory for period 2
- Opening inventory
Total production required

Number of periods
Opening inventory
+:
Ending inventory
+ Production -
Forecast Demand
Previous period's ending inventory

Forecast Demand
Production
Master Production Schedule
Projected available balance (PAB)

PAB for period
1:
PAB for period 2
Supply
Quantity on hand
onward
+ Scheduled
Prior period's PAB
Available to promise (ATP) for period
Demand
I :
MPS Receipt
Forecast Demand
Scheduled MpS Receipt
Forecast Demand
Quantity on hand The sum of customer orders due before

the next MPS scheduled receipt
ATP for period 2 onward MPS scheduled receipt

MPS scheduled receipt
The sum of customer orders due before the next
,s,s^s/o1v
Net
4: MATEfuIAL REQUTREMENTS hLANNING (MRp)
requirements
CAPACITY MANAGEMENT & PRODUCTION ACTIVITY
^SES^S1OAT5..
CONTROL
Available time (hrs)
Utilization
Gross requirements - Available inventory
Number of machines or workers

x Number of days per week
ffi
Efficiency
Standard hours of work
Hours of operation per day
t00%
nroduced X
100%
Hours actually worked

Rated caacity (std hrs)
(Calculated capacity)
Demonstrated capacity (std

(Measured capacity)
Available time
hrs) :
utilization (%)
or
Operation
time
Efficiency (%)
Average capacity
critical ratio (and the different ways of wording the
Time remaining
Work remaining
Actual time remaining

Lead time remaining
Due date - Present date

Lead time remaining
Setup time + Run time

and move times
same formula)
Time to due date remaining _

Expected elapse time to finish the job
er routing or work centre files) + Allow for queue, wait
Total
load :
time
Setup
Operation time per
order :
Manufacturing Lead
(Run time per piece
Order quantity
Time :
Queue
Backlog
Previous backlog
(Input / Output Control)
Cumulative Variance :
(Input / Output Control)
Input
cost :
Capital costs
Ordering
cost
Production control costs
Owners
Income
Liabilities
equity
Cost of goods sold
Run
+ Wait *
+ Actual -
Storage costs
Risk costs
Setup and teardown costs
Liabilities
Expenses
margin)
Revenue
Move
Planned
Owner's equity
Assets
Revenue
Gross profit (Gross
- Ouut
Carrying
Assets
Operation time per piece
Setup
Previous variance
x Order quanttty)
Total cost of goods sold
Lost capacity costs
Net income
rofit) :
Inventory turns
ratio :
Average inventory in
Days of
Gross
supply
profit - General
Annual cost of goods sold _

Average inventory in dollars
dollars
and administrative expenses
Annual cost of goods sold

Inventory turns ratio
Inventory on hand
Average daily usage
SESSION 7: ITEM INVENTORY MANAGEMENT _

Number of orders per
Average
year
inventory
Annual demand
Order quantity
Order quantitv
2
Annual cost of ordering

or
Annual cost of
:
:
carrying
Annual demand
Order quantity
Cost of ordering
Number of orders x Cost per order
order quantitv
x unit cost x
cost of carrying
Total inventory
cost
Annual ordering cost
Annual carrying cost
Economic order quantify
(EOO :
Where:
Order point
:
:
:
:
A
S
i
C
(OP) : DDLT +
Annual usage in units

Ordering costs in dollars
Annual inventory carrying costs (as a decimal)
Unit cost
SS
Demand during lead time
+ Safety stock
Periodic Review
Target level (T)
-: ,B"ffi:HJ"
Order
quantity
ABC classfication
o/o
review period
* Demand during the lead time) + safety stock
- Quantity on hand
Target level
of items (one unit's
worth)
100
Number of observations
80 120 Rule
ABC
Classification
%o
of
Vo
of
Impact
Items
20
B
C
30
50
15
80
5
,SES,SIOI
8: PURCHASING & PHYSICAL DISTRIBUTION
Physical dstribution
Total cost
Transportation costs
Dis tribution r e quirements
planning
Inventory carrying costs
Central supply's gross requirements
SESSION
The sum of all distribution centres planned order releases for the
Period
10: TIIEORY OF CONSTRAINTS
Throughput
Salesrevenue
Truevariablecosts

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BASICS OF SUPPLY CHAIN

Period average demand

seasonal demand (seasonal index) x (De-seasonalized demand)

Mean absolute deviation

Annual demand forecast

Sum of absolute deviations :

Sum of period sales

Sum of absolute errors

Level Production Plan

Total production needed

Total forecast demand

Production required each period

Ending inventory for period

Ending inventory for period 2

Total production required

Previous period's ending inventory

Master Production Schedule

Projected available balance (PAB)

PAB for period 2

Prior period's PAB

Available to promise (ATP) for period

Scheduled MpS Receipt

Quantity on hand The sum of customer orders due before

ATP for period 2 onward MPS scheduled receipt

The sum of customer orders due before the next

4: MATEfuIAL REQUTREMENTS hLANNING (MRp)

CAPACITY MANAGEMENT & PRODUCTION ACTIVITY

Available time (hrs)

Gross requirements - Available inventory

Number of machines or workers

Standard hours of work

Hours of operation per day

Hours actually worked

Demonstrated capacity (std

critical ratio (and the different ways of wording the

Actual time remaining

Due date - Present date

Setup time + Run time

Time to due date remaining _

er routing or work centre files) + Allow for queue, wait

Operation time per

(Run time per piece

Production control costs

Cost of goods sold

Setup and teardown costs

Gross profit (Gross

Operation time per piece

Total cost of goods sold

Lost capacity costs

Annual cost of goods sold _

and administrative expenses

Annual cost of goods sold

SESSION 7: ITEM INVENTORY MANAGEMENT _

Annual cost of ordering

Number of orders x Cost per order

Annual ordering cost

Annual carrying cost

Economic order quantify

Annual usage in units